tomorrow. you don't want to miss that. that is a pretty nice "willis report." thank you for joining us and have a great night. we will see you tomorrow. lou: good evening, everybody. you are looking at live pictures of the streets of cairo tonight. day three of what has been angry and violent protests. those protests still raging in the streets of cairo. you are looking at some of the thousands of demonstrators were taken up positions of the security gates to the american embassy. tear gas clouds hanging in the air tonight. security forces have clashed with demonstrators throughout much of the day. it is 1:00 o'clock in the morning there.

egyptian president mohammed morsi has vowed not to defend american diplomatic buildings, including the u.s. embassy, even as his muslim brotherhood organization prepares a massive demonstration throughout the country to be held tomorrow. the brotherhood calling upon the egyptians to take to the streets for what is being called a full day of anti-american protests tomorrow. and in benghazi and libya, reports that libyan authorities have arrested four men suspected of taking part in tuesday's attack on the u.s. consulate, resulting in the murder of our ambassador, christopher stephens and three other americans. as you can see, unrest and demonstrations in the middle east are spreading. in what appears to be an organized series of protests and demonstrations, protesters have showed up at our embassies in tunisia, morocco, sudan, bangladesh, and yemen as well.

the american embassy stormed by a group of protesters and turned back. an unusual alliance has taken hold in iraq. shia muslims have been working together with sunnis and their protest against the united states. they have joined forces as they chant death to america in the streets of baghdad. as those protests progressed over the last few days, president obama and his administration struggling to even define our relationship with some of those countries, including egypt. president obama, who refused to take questions from the white house press corps did sit down with telemundo and tried to explain his view of the american relationship with egypt. he said i don't think we would consider them in our life that we don't consider them an enemy. a squall of criticism followed.

the white house trying to explain what president obama meant to say. spokesman tommy bidder didn't help a white house effort. he said the word ally doesn't amount to much. and call the term ally a legal term of art. for the record, the oxford english dictionary defines the term as a person or organization that cooperates with or helps another in a particular activity. not much art. in that, a simple word. not necessarily a term. for the president's enjoyment, enemy means a hostile nation or its armed forces or citizens. meanwhile from the white house come obama campaign, much of the mainstream media, and even some republicans going after governor romney's criticism of the

initial apologies released by the cairo embassy. the very same words that were disavowed by president obama himself and removed from the embassy website. many of governor romney's supporters are wondering why more republicans are failing to voice their support. where were his surrogates? undeterred and unhesitatingly, governor romney has kept up the pressure on president obama, criticizing what he calls his failure to lead. >> the world needs american leadership. the middle east needs leadership. >> president obama and his administration have been repeatedly caught unprepared with a furious pace of developments in the violence and chaos that have swept much of

the arab world over the past three days. president obama struggling with our legal and perceived relationship with a fledgling democracy in egypt. ed henry with our report. reporter: after accusing his republican rival, president obama's own administration was in damage control mode. after the president did an interview with telemundo with what sounded like a dramatic shift in u.s. policy towards egypt. >> i don't think that we would consider them an ally. but we don't consider them an enemy. they are a new government is trying to find its way. >> back in the 1980s, egypt was designated as one of the handfuls of non-nato allies which enjoys the special status, such as buying military equipment more easily. jay carney today insisted this was not a gaffe, by telling reporters that the president in legal terms was speaking correctly, that we do not have an alliance with egypt.

an ally is a legal term of art. as i said, we don't have a mutual defense treaty with egypt like we do with our nato allies. since the u.s. also does not have mutual disparate content defense treaties, the state department spokeswoman got a bit awkward. >> i'm going to refrain to the white house for the question on the. >> as reporters pressed, he gave in and said egypt is an ally. >> they are a major non-nato ally and a recipient of the privileges that that entails. >> the mixed message continued on capitol hill. >> we will see a. >> the confusion comes as violence spreads across the middle east with hundreds of protesters storming the embassy in yemen. as the president continues his second day of campaigning out west, he referenced a phone call he had with mohammed morsi, plotting to protect the embassy in cairo, which has faced protests for days.

we are underscoring that they have an obligation to cooperate with us and protect our citizens. that is part of their job. reporter: mohammed morsi finally issued a statement announcing the violence. >> we have to protect all visitors, tourists, embassies, and diplomatic people. lou: ed henry, fox news chief white house correspondent. president obama running five points ahead of governor romney now in the gallup daily tracking poll despite being utterly besieged, not only in the

foreign policy arena but domestically as well. ben bernanke trying to do with the president has not been able to. to revive a struggling economy and create jobs. we are taking all that up here tonight. we will be talking with some of the foremost economic thinkers in the country. austan goolsbee. billionaire publisher, real estate mogul, issue number one remains the economy. federal reserve chairman ben bernanke reminding us all of that. today, doing all he could to revive this economy. the fed announcing an aggressive new round of stimulus buying mortgage-backed securities every month until the outlook for jobs improves substantially. it also extended its pledge of interest rates through mid-2015. the fed chairman saying the new stimulus will support recovery,

but it's certainly not a cure for high unemployment in itself. austin, what is your reaction. extraordinarily, an aggressive move by chairman ben bernanke. >> i have two reactions. the first reaction is, we should be at the fed trying to figure out how to lose the monetary policy. five or 10 years ago, connie would have unemployment above 8%

inflation well below the 2% target and the gdp growing 2%. the problem is, the interest rates are 0%. how'd he do that? they're trying to come up with it. the second reaction that i have is they use up most of their best bullets for qe. the first time they get it, the second time they did did it, and the third time they did it. so i can see why they are doing this. i just don't think it would be as big of a reaction in the marketplace is maybe the proponents hoped. lou: diminishing returns in terms of impact, but nonetheless, this market made it pretty clear to the federal serve as well as everyone else that quantitative easing has been built-in to the investor outlook over the course of the next many months. it is unimaginable that they wouldn't have done something because the impact of the markets would've been decidedly

negative. >> i think the impact would've been decidedly negative. that is correct. i am not totally convinced that that is even in the top three or four considerations when the fed makes its decision. but i think you are absolutely right that the market has factored that in. lou: for all of us retail folks who are invested in this economy and in these markets, we get more than just a little passing interest in the impact there. let me ask you this, we are sitting here now, it is extraordinary to think, four years into the economic crisis in the recovery that is anemic. why is there not more discussion about the solutions. direct, incurable, specific solutions to creating economic growth and driving job creation. we are hearing platitudes and ambiguities when comments from the left and the right.

the policies of government. specifically, what are the policies that we are following that is creating this jobless recovery? >> what policies? >> i don't know. i think that's a great question. i think you start to see some of it sometimes from the politicians, but mainly, we are in an era of combat. i think that deeply undermined our ability to work together and try to solve the jobs crisis or the long-run fiscal crisis in the country. when we look at the solutions, we ought to look beyond just our borders. because the one overwhelming fact about this modest recovery is that this is a worldwide phenomenon and it is not just having to do with the united states and not just having to do with policy in the united

states. you are seeing borderline catastrophe in europe, dramatic slowdown throughout asia, including in china and india, as well as in the more advanced countries like japan. this is a tough spot for us to get out of. historically coming out of financial crises, it does take a long time. we are seeing that play out here. i hope we do get to the specific discussions are talking about. lou: let's put it on the record. i tried very hard. let's continue the conversation and begin the conversation to that question next time. what are the solutions, and get that out. because the pain is too expensive and the stakes are far too high to continue the combat without meaning thank you, austan goolsbee. great to have you with us. >> the herb world is on fire. a major intelligence failure or an administration locally unprepared as president obama's arab spring becomes springtime

for radical islam is. bob maginnis is here. despite all the fury in the arab world, it is still the economy. unemployment is up, income is down, government dependency on the rise. more zuckerman and the netanyahu and obama feud hmm, it says here that cheerios helps lower cholesterol

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lou: in tonight's tech connect, apple shares hitting a record high. apple shares up more than 2%. a good day across the board. apple having a very good day. $683. goldman lifting its price target to 810, ways to go. the upgrade based on faster than expected rollout for the new iphone five, built on sales that will be in 22 countries, if you can imagine, by the end of the month. apple the only stock riding high. stocks saved a huge rally after the fed took aggressive action. stocks hitting multi- year's highs, the third round of online. qe-3 is here and much more.

elise were today, it is in the market. the dow jones industrial of 207 points, closing at the highest level since december. 2007, the start of the great recession. the s&p ended up 23 points on the nasdaq up 42. weekly jobless claims rising 15,000. still under 400,000 in the four-month -- i'm sorry, four-week average. that is the highest level in two months. labor officials blaming hurricane isaac for the increase in claims. producer prices up 1.7% and the economists are blaming higher energy prices. in corporate news, medical device maker rising 1.5% after announcing the closure of the plant in south carolina and moving those operations because rica. 600 full-time employees will be laid off. my next guest says we are in a modern-day depression.

no matter who wins the election, the next president must address our jobs crisis or be guilty of betrayal. joining us now is more zuckerman. good to have you with us. >> that the trail is a big word. is it a bit of a betrayal? do think that we are only now starting to hear some energy and the president's voice when he talks about job creation and economic growth? >> i think it is the obvious subject. you have the largest crisis facing this country. i don't know that it's fair to call it a betrayal on any level to we are in an economic turn down, therefore, it is unpredictable. we have not yet mastered the way of responding to it. i was very critical of the fiscal policy because i thought way too much when jews shall we say, the congress who basically got the kind of kick from it that we would have liked.

but we are still faced with a tough economic situation. >> a top economic situation. 25 million folks. those who are unemployed or underemployed. >> that is right. lou: the one as you wrote about in your most recent op-ed. to me, these are the forgotten people right now in america. and to me it is crazy that broadcasters, writers in various publications, business leaders, are accepting you because you have been a stalwart in answering question. as i said to austan goolsbee, why are we not talking about solutions why are we not asking the questions people don't want to talk about. what is the impact of the policies that we have been following for the past decade. >> they're not good because our economy is not growing. we are not creating jobs. what is the point of it all? >> we certainly have to review

and look at what we have been doing. let's just not repeat it, let me put it that way. one of the major things is the accumulation of debt that we have had in the private sector and where the sovereign debt is being bailed out of people are trying to reduce it because they are so pessimistic about their own economic future. that is going to restrain consumer spending. the thing that worries me the most is the unemployment numbers and the fact that we are in effect the modern-day depression. we have 45 plus million people who are on food stamps and 50 million or so people on disability. we have millions of people on welfare. these are people who are not able to pursue this. lou: there is not one person who fits into the category of the bureau of labor statistics.

amongst the 25 million. who doesn't know first-hand. there isn't one intelligent, informed, government elected official, government bureaucrat, who doesn't know what you're saying. and yet, we are not watching the mainstream media look deeply into the consequences of policy choices taken by the government. at all levels. we are not looking and answering those questions and talking about business practices that are suffocating this great free enterprise. >> well, i think it is one of those moments when we are just not facing up to that reality. those kinds of issues really have to come into a sharp clarity by the political leadership. romney has not yet really focused on it in a way that can be effective. i suspect he will. the president always just sort of tries to kick the can down the road. lou: the middle middle east, as

we watch what is happening, again, the madness ensues. your thoughts? >> what we are involved in is an absolute mess that there is a radicalism that has taken over large parts of the inner world and we will have an enormous problem that will go on for decades. lou: thank you for being with us. up next, the economy is struggling. gas prices going through the roof. massive unemployment, a major crisis in the middle east. its 2012 a repeat of 1979? the assault on american interests in the middle east. as the arab spring, has it turned into an anti-american radical islamist rage? bob maginnis joins us with his analysis next. i'm so glad you called. thank you.

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the. >> president obama's latest effort to attack romney to be a rebuke to the reaction to this attack of cairo but polling criticism from president jimmy carter at -- jamaica ardor of ronald reagan. >> a broader lesson to be learned to knit romney shuberts to in things later. >> what some politicians

shoot first and ask questions later. >> through history some things do paygo and president cargo -- president carter talk about the u.s., egypt, throughout the mill east lt. colonel robert maginnis. turn to the obvious question how could any ambassador enter a safe house that was not save with the consulate not protected in one of the most violent and volatile places of the united states? >> we will know but he felt uncomfortable he had friends. they celebrated him as a hero. bet he knew the al qaeda

flag was flown over the city. for some reason somebody did not tell him what was brewing. 9/11 was a red flag. they should have known but they failed. lou: if this was the ambassador's choice not to have marines but to have responsibility for his own death that to waste should not be his but a matter of state department, protocol amd requirement. >> absolutely. the marines are there for the very reason. next-door supposedly the ambassador told the marines

not to take live ammunition into the yard for the people to get over the fence. that thinking is dumb in this part of the world. think of what could happen anywhere in the world if the marines are not ready to kill if you try to kill the ambassador. it does not make sense. lou: it is clear but awkward it did not occur to washington these were coordinated attacks being carried out. tomorrow in egypt with the muslim brotherhood, nationwide protest of u.s. policy is. your thoughts what does the

future hold? >> the new president of the muslim brotherhood decided to go to a iran last week and also went to china, the president says he wants to forgive the $1 billion that we loaned them. and if it is a dumb policy. it will antagonize that part of the growth and communicate. the perception is widely shared afghanistan war morocco. we are perceived we will lose more lives i fear in this country as well. lou: we appreciate your insight. thank you. the federal reserve in gauged in the markets. what's next? blackrock peter fischer will

tell us. an ambassador and three americans murdered. what is the first lady considered to be our greatest threat to to national security? will they get away with blaming a movie and romney for the collapse of policies ? the "a team" is here.

lou: the federal reserve not holding back. my next guest over at low interest rates into what is a liquidity trap we have peter fischer from blackrock former undersecretary of of the united states treasury department.

with ben bernanke and the action today? >> the world economy is slowing, china is slowing down, if you are the chairman of the fed you are worried. he did four things today. to buy 40 million mortgages in a month in addition to what you already buys. lou: that sounds like $1 trillion. >> garn top of that he did that until he thought it would be improving. the forecast for the labor market. he extended how long they will hold short-term interest rates down until 2015. on top of that keep monetary

policy easing even after the recovery. for different reaction. big reaction of the equity market. lou: pushing down the rate to a little but looks like less of the slopes been i guess. but the looks like it takes out the interest rates around five 1/7 years. >> it is supportive of the housing market itself the amber is starting to get ratter the bellows of the fed to get the fire going. >> baby. a housing market is

stabilized but it housing is only 2% of our e economy. we could stimulate but it will not move the overall dietl. it is nice to stimulate it. it is a positive. but big enough to offset the negative to discourage other lending? it is replacing other lending they did that with the interbank and all the pipes run to the fed now what buys some mortgages themselves. lou: and then they will own all of the debt to of the country's pride that diminishes the rest of us want to lend. we get compensated for lending on the end of the

put -- behalf of the pension fund we get a spread that has to cover us for the rates going up or down. we have to protect yourselves and what we are paid is too little. lou: what was the nonsense of the campaign the platitudes and bromides sputtering. what will it take in the near-term specifically to get the economy growing? we have to make businessmen want to expand factories. that is the be all and end all. with a stable interest-rate outlook.

lou: that makes them sound like wussies. with those leaders of industry everything has to be so predictable and does not encroach upon a sunny disposition. what is going on? >> it is a very uncertain world. >> there is a lot of uncertainty. you can say they should be cowards. >> capital always once a safe return. i think we are. lou: please come back.

the unexpected vacation for chicago students could come to an end. will be winners besides the teachers at the conclusion of the teachers' strike? of first lady warned about an imminent threat to and not talking about radical islam best. next. [ male announcer ] let's say you need to take care of legal matters.

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lou: bulls sides of the chicago teachers strike optimistic ideal would be reached. this is political theater. carry a. sues could be backing class by monday.

but that rahm emanuel not get anything. to get what the union once after a few days the strike it will make a go easy with the taxpayers right is likability factor is higher than vice president biden since he was named to the republican ticket. those two are in a statistical dead heat with favorability ratings but the republican nominee has a bigger unfavorability rating. time marches on a list like

mitt romney's choice was a smart decision. michelle obama says obesity is a national security threat to just yesterday. >> number one greatest national security threat is obesity. >> absolutely. the number one paying ages 17 through 24 qualifying for the military is obesity. it is a security issue for the country. lou: she made similar comments this to think we are safer now after boating to ban large so does in movie theaters and restaurants? although there are other threats perhaps more deserving of our officials

time. but the self-described lower class are growing. nearly one-third of americans describe themselves as being the lower class. also for those who don't have a bank accounts up from 9 million from three years ago. the reason is people don't have enough money. up next if the president redefines the key term but beyond state department contradicts. the politics of the middle east. the "a team" if there ever

were one.

lou: joining us now the "a team" fox news contributor monica crowley. fox news political strategist monica mcglowan. and judith miller. the white house walking back discussion parsing of the term allied prepare your reaction? >> perhaps the president pulled a net romney. it is what you say speak keying off the cuff the

white house is correct light is a legal term. lou: really? really? they have handled a very difficult situation pretty well. they could have said something worse. egypt is an important ally. lou: i am sorry. i am sorry. not an ally according to the president. [laughter] >> i think egypt is an ally. it has to me. >> the commander-in-chief immersed in the deep international crisis forced into clinton and parsing of words depending on the meeting of the word ally. we're looking for clarity

from the president of united states at this moot-- at this moment. they're watching every single word he is all of the map did number one. >> when mubarak was the head of the chips you could say they were the ally. now i don't believe that they do. we should suspend all money to rehab the problems until we find out what happened. lou: ron paul has issued legislation to that effect. >> is that stupid from united states to borrow money from china to handed over? >> added is how we do foreign-aid. the problem is. lou: do mean that? >> egypt is the largest arab

country with 84 million people. yes. fighting counterterrorism. >> see what happens on friday. i am sure the president has a candid discussion about the safety of american property and personnel. >> with george bush as president but did you have obama who is. lou: but then they went back to george w. bush. [laughter] i am stunned. they complain typically the democrats want to go back. >> the embassies were safe. >> sorry to interrupt but

you're looking at live pictures from the u.s. embassy outside of cairo the demonstrators taking up a position and throwing rocks and the security forces are there. we will keep you up-to-date up-to-date -- up-to-date it is 2:00 in the morning and the demonstrations it is the most important organization in the world. they have that ground game they just have to blow the whistle what is this? the operation of the

governing party. >> i have to disagree during this entire period is the people to the right to of the muslim brotherhood to test the new government. >> they played no role in this? >> i did not say they're not playing a role but people who don't to a want to go straight to power but they are justified in attacking yes. lou: we learned our consulate where americans were murdered, assassinated if you will, had no protection at all. security contractors at hand

but no physical security. >> we're getting word today both the white house and congress were briefed demonstrations may be coming but still the consulates in the most sensitive part of her not protected? lou: thank you for being here. the "a team." one viewer rolls the dice. you will love this. stay with us. hey! did you know that honey nut cheerios

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